Sainsbury’s to Exit Financial Services

Sainsbury‘s Bank has announced plans to withdraw from financial services, intending to offload its fully-owned lender, Sainsbury’s Bank, and transition to providing financial services through third parties. The move, described as a “phased withdrawal,” includes credit cards, store cards, loans, savings accounts, and the Argos store card. Sainsbury’s aims to adopt a “distributed model” by having another provider or providers operate the bank under the same brand through a “white labelling” approach.

This strategic decision aligns with Sainsbury’s focus on its core retail business, marking a shift away from the banking sector. The move follows a trend among British retailers, including Tesco and the Co-operative Bank, contemplating changes or potential exits from the financial services landscape. The plan allows Sainsbury’s to remove the bank from its balance sheet while maintaining its brand presence in the financial sector.

Sainsbury’s emphasised that its services and products would not be immediately impacted by the announcement, assuring customers that it is “business as usual for now at Sainsbury’s Bank.” The company had explored a sale of its banking arm in 2020 but decided against it the following year, citing no benefit to shareholders. Robert Mulhall, a former executive at Allied Irish Bank, is set to replace Jim Brown as the chief executive of Sainsbury’s Bank at the end of March.

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